Will the Ilisu Dam Drown Out Western Credibility?

The ancient town of Hasankeyf will be flooded by the Ilisu Dam (peevishsoul)

Governments and financial institutions have come under increasing pressure not to fund environmentally and socially destructive projects. In the case of the Chad-Cameroon Oil Pipeline, the Nam Theun 2 Dam in Laos and the Ilisu Dam in Turkey, the World Bank and Western governments have resorted to approving financial support under strict conditions. This approach has so far not worked because funders were not serious about enforcing their conditions. The Ilisu Dam is now facing a crunch. It may salvage the remaining credibility of Western donors – or drown it out completely. (Updated)

The $3.7 billion Chad-Cameroon Pipeline was the first example of the World Bank’s new conditional approach. The Bank forced the Chadian government to invest 80 percent of its oil revenues in a special poverty reduction fund to prevent them from being skimmed off into private pockets. In his book, The World’s Banker, Sebastian Mallaby called this “a novel trick” – “a revolutionary attempt to rescue Africa from its sorry experience with oil”. Yet not surprisingly, Chad’s military ruler showed the World Bank the door as soon as the pipeline was completed. He is now spending the oil revenues to buy arms and keep his own clique in power – courtesy of the World Bank.

The Nam Theun 2 Dam in Laos is still under construction, but the developer is already lagging behind in implementing the World Bank’s social and environmental conditions. I have covered the project’s current status in a separate blog entry. International Rivers has repeatedly informed the Bank’s Board of Directors about the project’s lack of compliance with their conditions, but the directors have so far not shown any interest in this. At a recent meeting in Brussels, Germany’s director Michael Hofmann dressed my colleague Shannon Lawrence down for even raising questions about the project.

In 2005, the German government supported the Nam Theun 2 Dam after long deliberations. “The risks were not ignored; they will require an ongoing and critical monitoring, including through external parties”, Manfred Konukiewitz, a senior government official, argued in defense of the German position (pp. 15ff.). “A lot will depend on the quality of project monitoring. This is appropriate: A multi-layered system will allow all actors to recognize and correct problems early.” Fair enough. But that was then. After approving the project, Germany and other governments have abandoned their responsibility for the problems which the monitoring system has brought up.

So what about Ilisu? The dam on the Tigris in Turkey’s Southeast Anatolia region will displace 55,000-65,000 Kurdish people, inundate the 10,000 years-old city of Hasankeyf, and degrade the region’s environment. Due to strong opposition in Turkey and at home, the governments of Austria, Germany and Switzerland in March 2007 only approved export credits for the project under a set of 153 terms of reference (or ToRs). A committee of experts, consisting of long-time World Bank officials, academics and consultants, was asked to monitor the implementation of these conditions, with three subcommittees covering the environment, resettlement, and cultural heritage.

The subcommittees recently published their first updates, and their conclusions were devastating. Of the 35 ToRs relating to resettlement and income restoration, none of the prescribed activities had been started on 26 conditions, and no information was available on the status of another four. Only in the case of five conditions, “some activities have been found to be partly done” – and they concerned “mostly the expropriation” of affected people. The experts found that the responsible Turkish authorities had no interest or information about the ToRs which they had agreed upon with the donor governments. They came to the “sobering conclusion that a period of one year to 15 months [since the project’s approval] was largely lost”.

The findings of the subcommittee on the environment were equally bleak. The experts found that critical surveys on terrestrial and aquatic biodiversity and water-borne diseases, which need to be carried out before construction starts, had not even been initiated yet. Further, the dam authorities had not even begun to prepare an environmental management plan for the project. The subcommittee warned that “failure to start these investigations in early March at the latest could mean that the start of construction work would need to be postponed by one year in order to meet the [ToR] requirements”. Trying to address the social and environmental problems while construction was going on reminded the experts of the World Bank’s disastrous experience in India’s Narmada Valley.

The head of the environmental subscommittee told me that according to the Turkish authorities, two of the requested efforts had been started, and that he did not have any information on the status of the other tasks. The next site visit is planned for mid-May.

The response of the donor governments to the expert reports has so far been mixed. On March 11, NGO representatives, including my colleague Ann-Kathrin Schneider, met with the German government and export credit agency to discuss the findings of the experts. The government officials made it clear that they did not intend to suspend disbursement of their export credit. Instead, they were grateful that the reports gave them a chance to discuss the project with the Turkish authorities. As if this was the point! We’re happy to talk about environmental destruction and human rights abuses as long as we don’t have to act? It’s a pity that you don’t honor our agreements but it’s good that we can talk about it? Already the export credit agencies have granted Turkey a new deadline of early May to report progress on the ToRs. Ulrich Eichelmann of the Stop Ilisu campaign comments that this deadline will give the dam authorities sufficient time to start construction.

Activists from the affected region and NGOs like WEED, the Berne Declaration and ECA Watch reacted furiously to the Western governments’ lack of spine. More than 100 affected people announced that they would seek asylum in the donor countries if the project went forward. While the export credit agencies are wavering, Germany’s development minister Heidemarie Wieczorek-Zeul put her foot down. In Der Spiegel of March 24, “red Heidemarie”, as the minister is called, warned that she would “withdraw export guarantees if the agreed measures are not applied”. In response to questions in parliament, Peter Hintze, secretary of state in Germany's Ministry of Economics and Technology, said that the delays and lack of compliance of the Turkish government were "unacceptable". Hintze announced that the donor governments would consider measures such as postponing the start of construction or cancelling the contracts if Turkey didn't address the gaps soon.

Can the Western funders still salvage their credibility in the Ilisu Project? Or is the conditional approach nothing but a fig leaf for the hypocrisy of Western donors? The coming weeks will tell.

Peter Bosshard is the policy director of International Rivers. His blog, Wet, Wild and Wonky, appears at www.internationalrivers.org/en/blog/peter-bosshard